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Tokyo climbs on late buying
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May 31, 1999: 5:12 a.m. ET
Japanese stocks end higher on rosy corporate news; HK gets futures lift
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LONDON (CNNfn) - A batch of upbeat corporate earnings and news of a revamp in the airline sector helped soothe jittery nerves in Tokyo and prod stocks gently higher Monday.
Robust futures buying underpinned a 104-point sprint on Hong Kong's Hang Seng that reversed earlier losses.
After drifting through listless trade early in the day ahead of holiday-related market closures in New York and London, Tokyo's benchmark Nikkei 225 staged a late turnaround to close up 138.97 points, or 0.87 percent, at 16,111.65.
Traders said an end-of-week rally on the Dow Jones Industrial average - which closed up 0.89 percent amid receding fears of an imminent U.S. interest rate hike - lent support.
The Nikkei slipped below the psychologically significant 16,000 level Friday for the first time in almost two months. Monday's modest recovery came as two high-tech giants forecast positive earning and several consumer finance companies racked up impressive gains.
After finishing the morning session 10.69 points below water, Hong Kong's Hang Seng bounced into the black on futures-driven buying to close up 0.73 percent, or 87.87 points, at 12,147.12.
The rebound got a spur from resurgent Chinese "red-chip" companies which have suffered recently from souring Sino-U.S. relations. An intensifying pay dispute at air carrier Cathay Pacific weighed on the blue-chip index throughout the session.
Elsewhere, Singapore was up 0.3 percent in late afternoon, at 1,909.75, while South Korea, Australia and Indonesia all advanced.
Tokyo, Asia's largest exchange, had been hampered earlier in the day by a dearth of international investors ahead of the market holidays in New York and London.
Investors remained attentive Monday to any signals that the government is serious about promoting economic recovery.
A member of the Bank of Japan's Policy Board asserted Monday that Japanese firms should shed illiquid land and assets to trim bloated payrolls and wipe out overcapacity. The remarks came ahead of an eagerly awaited government stimulus plan due to be unveiled June 11.
Separately, a Japanese business group said Monday that Japan's GDP in the fiscal year ending March 31 may have fallen as much as 2.5 percent due to anemic private-sector spending.
Chip makers and high-tech companies posted mixed performances in Tokyo as investors pondered the health of corporate balance sheets.
Sega Enterprises, a Japanese game maker, fell 2.8 percent to 1,940 yen after the company forecast a third straight year of losses resulting from the overseas roll-out of its Dreamcast home video game console and high marketing costs.
Sony Corp. gave up 1.14 percent to 11,230 yen, while Advantest Corp. slid to 9,460 yen, or 1.36 percent.
On the upside, Nippon Airways Co. Ltd. climbed to 373 yen, a 3.6 percent rise, after the carrier refused to comment on a report that its new management plan calls for slashing 2,000 jobs over the next four years. Fujitsu Ltd. slipped 0.5 percent following the group's announcement last week that it expects to post a net profit of 80 billion yen for in the 1999-2000 business year, compared with a loss of 13.64 billion yen in 1998-1999.
Toyota Motor Corp. Monday refused to confirm a German newspaper report that it had negotiated a licensing deal with German automaker Volkswagen (FVOW).
Japan Telecom spurted 13.51 percent, or its upper daily limit of 200,000 yen, to end at 1.68 million yen after a ratings upgrade.
In the consumer finance sector, a similar ratings upgrade by New Japan Securities Co. for Acom Co. Ltd. helped drive a nearly 10 percent run-up in Acom's stock, to 9,500 yen. Other consumer finance companies followed in Acom's wake, with Sanyo Shinpan Finance Co. racing up 4.7 percent and Takefuji Co. adding 5.45 percent.
Red chip rebound
In Hong Kong, stocks got a boost from a modest rebound in shares of mainland companies earmarked for overseas investors. Mainland companies took a hit in recent days after bankers expressed dismay over a restructuring plan unveiled by a debt-saddled Chinese company, Guangdong Enterprises.
The Nikkei gains lent momentum to the Hang Seng index amid solidity in banking and property blue chips. HSBC Holdings, the territory's largest bank, closed up HK$4.00 at HK$258.00, while New World Developments notched up a HK$1.00 gain to HK$19.950.But the trading holiday in New York and London kept most potential buyers on the sidelines.
Shares of Cathay Pacific plummeted 10 percent to HK$10.70 as the air carrier canceled 27 flights Monday after pilots facing down the air carrier in a pay dispute called in sick.
Elsewhere in the airline sector, The Bank of East Asia denied that it was in talks over a possible investment in Philippine Airlines aimed at bailing out the ailing carrier. Bank of East Asia stock slipped HK$0.05 to HK$16.950.
A strong performance by bank stocks helped Australia's All Ordinaries to close 0.4 percent higher, at 2,900.2. But jitters over forthcoming economic data, as well as fresh numbers revealing a record A$1.915 billion April trade deficit dampened sentiment.
Singapore's Straits Times index was up 0.3 percent in the afternoon, at 1,909.75, as small-cap stocks dominated trade. Property and hotel stocks came under pressure as many traders questioned blue chip levels in the wake of a recent run-up.
Kuala Lumpur stocks slipped 0.5 percent in quiet afternoon trade as investors locked in gains. In Jakarta, gains in large-cap blue chips helped propel a 0.4 percent rise on the composite index. Index powerhouses Telekom and Indosat made robust strides.
Manila shares ended 1.15 percent higher, at 2,419.83, driven by sharp gains in telecom heavyweight, Philippine Long Distance Telephone Co. Taiwan's weighted index retreated 1.4 percent, while Thai stocks had slumped more than 2 percent by late afternoon.
--from staff and wire reports
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